5th March

Borrow from abroad

The article talks about the use of foreign borrowing as a temporary solution to the crisis. It also talks about the steps centre and state should take to bring down the fiscal hole as soon as the recovery starts. 

Depreciating rupee, decreasing foreign capital inflows and huge fiscal deficit set a perfect backdrop to start foreign borrowing. Not only will it provide support to the currency but also boost reserves, prevent crowding out of private sector and prevent decline in interest rates. Comparing huge centre-state combined fiscal deficit with the amount of deposits banks have mobilized in past one year, it is evident that as soon as the economy recovers, private sector would pull out itself out of the market and sharp rise in interest rates would follow. Utilizing foreign reserves for financing the fiscal stimulus through issue of sovereign bonds would be a better option since S&P downgraded its outlook in India from stable to negative owing to the huge fiscal deficit. Such bonds could be placed at better rates then any private borrower can get. Moreover, when the rupee strengthens, as the economy recovers, the burden of sovereign borrowing would also decrease. 

However, such foreign borrowing can be catastrophic. State spending should go down as private investment and consumption pick up. Also centre should consider aggressive asset sale like that of surplus land and divestment in state enterprises and use the proceeds to repay the debt.

A googly from Swat

The article expresses concerns over the failed state in Pakistan and its repercussions on its neighboring countries especially when the subcontinent plans to host three most high-profile events in sports i.e. IPL T20, Commonwealth Games and ICC World Cup in the years to come.

The attack on the Sri Lankan team symbolizes the quick descent of Pakistan state surrendering to the Islamic extremism which found its way into the country from the Western border i.e. Swat Valley. The terrorism, now into its mainland, has exposed the failure in national security. Add to that the already ailing polity in Pakistan. These events have raised the security concerns for its neighbors, primarily India who is going to host IPL next month, Commonwealth Games next year and the ICC World Cup jointly with Pakistan, Sri Lanka and Bangladesh the year after. 

Sports, unfortunately, has always been imbricated with political context, apparent from Lahore incident. Pakistan’s sporting isolations is an indication of its steady drift towards conceding to extremist forces. However, the solution is not military but a holistic one. Ambivalent role of army and ailing polity makes things more difficult. And now, the decline of Pakistan, from a dysfunctional to failed state, owes to its political class.

Sartorial distractions

The article talks about the fashion world that comes as a distraction among the global meltdown. Fashion world also tries to bring up the feel-good-factor as instead of coming up with new designs they bring back the classic designs from the past.

Recently in the Milan Fashion Week, there was an extravaganza of Dolce & Gabbaria with their 1940s Hollywood suits and the famous silk gown of Marilyn Monroe. But the show stealer was Donatella Versace with the “safety pin dress” that catapulted Liz Hurley in the premier of her 1994 classic “Four Weddings and a Funeral” with Hugh Grant. It’s amazing to see such a simple dress stealing the show which otherwise wouldn’t have had a starlet wore it on the red carpet at LA. However, Britain was desperately looking for a distraction from the mad cow disease that jumped to humans, sale of Rover to BMW, discovery of murderers of Fred West’s children by himself and the Conservative regime hit by cash-for-questions affair.

Although fashion world is hardly ever considered visionary since it reflects the events that affects it buyers but Hurley-Versace show comes a pleasant distraction from the looming summer of displeasure.